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LONDON MARKET EARLY CALL: Higher call amid US Fed minutes optimism

Thu, 8th Apr 2021 06:59

(Alliance News) - Stock prices in London are seen opening higher on Thursday as investors digested the latest meeting minutes from the US Federal Reserve, which reaffirmed the central bank's commitment to supporting the economy.

IG futures indicate the FTSE 100 index is to open 28.68 points higher at 6,914.00. The blue-chip index closed up 61.77 points, or 0.9%, at 6,885.32 Wednesday.

The US Federal Reserve said it would continue to maintain an accommodative stance until its inflation outcomes are achieved, minutes from the mid-March meet of the Federal Open Market Committee showed Wednesday.

The policy-setting FOMC left its benchmark rate unchanged in the range of 0% to 0.25%, as widely expected. Following the two-day meeting, the Fed signalled that interest rates will remain at near zero through until 2023.

The minutes from the March 17 meeting of the FOMC noted: "Members agreed that the Federal Reserve was committed to using its full range of tools to support the US economy in this challenging time, thereby promoting its maximum-employment and price-stability goals."

The members also reaffirmed the central bank would aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

In the US on Wednesday, Wall Street ended mostly higher, with the Dow Jones Industrial Average up 0.1%, S&P 500 up 0.2%, but the Nasdaq Composite closed 0.2% lower.

"US markets traded in a fairly modest fashion with the S&P500 eking out a record close as investors adopted a cautious approach with stocks trading close to record highs. This fairly benign and optimistic environment is expected to see a positive open for markets here in Europe as investors absorb last night's Fed minutes," said CMC Markets analyst Michael Hewson.

In Asia, the Japanese Nikkei 225 index is down 0.2%. In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is up 0.7%.

Meanwhile, Prime Minister Boris Johnson has sought to reassure the public the Oxford/AstraZeneca vaccine is safe after UK regulators said there was a possible link between the jab and "extremely rare" blood clots.

The UK Medicines & Healthcare products Regulatory Agency said the benefits still outweigh the risks overall but while it has not concluded that the vaccine causes rare brain clots, it said the link is getting firmer.

Johnson sought to boost public confidence in the vaccine as he said the changes in its use would not force a change in the road map out of lockdown.

The pound was quoted at USD1.3765 early Thursday, up from USD1.3747 at the London equities close on Wednesday.

The euro was priced at USD1.1878, down from USD1.1891. Against the yen, the dollar was trading at JPY109.70, flat from JPY109.72.

Brent oil was quoted at USD62.82 a barrel on Thursday morning, up from USD62.08 late Wednesday in London. Gold was trading at USD1,742.74 an ounce, marginally higher against USD1,739.40.

In Thursday's international economic calendar, there is a German factory orders print at 0700 BST, French trade balance at 0745 BST, UK Markit construction PMI at 0930 BST and eurozone producer price index at 1000 BST.

In the UK corporate calendar, online fashion retailer ASOS will release half-year results, iron pellet producer Ferrexpo will publish first quarter production figures and asset manager Premier Miton will issue a trading statement.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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